Four local power companies on Jan. 11 filed a complaint with federal regulators requiring the Tennessee Valley Authority to provide them with unbundled transmission service, claiming that recent developments have "disrupted the economic utility" of their existing full-service contracts with the wholesale power supplier.

At the heart of the complaint (EL21-40), filed with the Federal Energy Regulatory Commission, is a new long-term contract program launched by the TVA in August 2019 that requires distributors to give 20 years' advance notice of termination. With contract terms that renew every year, the TVA is already facing a lawsuit filed by environmental groups claiming the initiative represents a "never-ending program."

While the vast majority of the TVA's 153 local public power distributors have opted to participate in the program, the four petitioners at issue — the Athens Utilities Board, Gibson Electric Membership Corp., Joe Wheeler Electric Membership Corp. and Volunteer Energy Cooperative — are seeking alternative sources of power.

Noting that the TVA's wholesale rates have increased nearly 10% between 2010 and 2019, the petitioners stated in their complaint that they are seeking unbundled rates with TVA because they are unwilling to submit to the "draconian" terms of the new long-term contract program.

The TVA owns all of the transmission facilities capable of serving the four companies' loads, meaning the petitioners would need to enter into new contracts with the TVA at unbundled rates for transmission service before securing alternative power supplies. According to the Jan. 11 complaint, however, the TVA has made clear through both a newly restated TVA Board policy and direct letters to petitioners that it will not enable alternative power supplies "under any circumstances."

The petitioners are therefore seeking an order from FERC directing the TVA to provide unbundled transmission service to the four local power companies while clarifying and formalizing its interconnection arrangements with their systems.

"Petitioners merely seek transmission service at a fair price in order to access alternative means of supply outside of the TVA footprint, where petitioners can meet their power supply needs at prices far below TVA's bundled rates and pass those savings along to their retail members/customers," the local companies said. "TVA has simply refused to negotiate such unbundled transmission service."